Your image is a little confusing. Volume bars are fixed to a horizontal origin; they are not shown as you illustrated in your attachment. Also, try not to get ahead of yourself and start trying to glean trading signals from the drills at this point. Volume peaks can occur in both long and short trends, they are not a signal to go from being long to being short. Just trying to help. Edit - Ah, I saw that even though you quoted Drill 4, your image is named Drill 5. My apologies, you seem to have illustrated price bars. Perhaps it might still be worthwhile to re-evaluate the drill without linking volume relationships to a specific direction though, and see what you find.
Hi everyone. Thanks for all the posts. For drill 3, the price casesposts 54 and 60 are good ones to print and keep handy. Good work on drill 4 which asked for the volume cases for three volume bars. Post 55 by nir introduced a good naming approach. posts57 and 61 siad how the color of volume bars shows turns and continuation.. post 61 by hero points out that the triads of volume bares work the same on longs as on shorts, a good thing to deduce. Drill 4 also introduces a concept (principle that we will adopt for many other principles we will find and define. IF you look at the four names of the triads, you see they form a loop in a sequence. Starting anywhere the order is: though>>increasing>>> peak>>>>trough. A four part loop. I will use the words "Order of Events" (OOE) to characterize the sequencing of patterns. Programers can See that RDBMS coding is a good application immediately. So by proper coloration of bars we can gleen a lot immediately be visual means. Lets look at one kind of price bar to see the power of color. Of corse, candlesticks are SOL for this perception you will now acquire. The Doji bar is a neutral bar and it does have a coloration which keeps us in trades. Most have found that leg 2 of a bar is the dominant color of the trend. We also know that legs can be missing in the count. To make money, a person trades in a market context. The CW expression "trade with the trend" means something in terms of making money It means trading in the DOMINANT DIRECTION OF THE MARKET. All a learning trader has to do it know this and also know how to measure it. So we did a drill and got a 5x5 matrix with all the possibilities. IN ALL CASES the LEG 2 "CONSISTENTLY tall you the dominant sentiment of the market. This is a deduction. As a person neters a trend he keeps holding his postion until the dominance of the market changes. As a reference slower duration bars can be used to, as CW traders say, "CONFIRM" the dominant sentiment. This is where the neutral doji bar comes into view. When price crooses the open of a doji, then the color of the bar leg 2 also changes. Books do not speak of such orrdinarily. Authors do not think this way, perhaps. So as you trade a trend, you eliminate all early exits by maintaining harmony worth the market dominance at all times. By doing the first few drills you get into a "grove" because you learn and have a memory (knowledge) that lets you "drive the car" unconsciously. That is you "always know that you know". What happens to anxiety, fear and anger the emotions of CW type trading?? they are replaced by comfort, support and confidence. As we are learning the independent variable "TELLS" the dependent variable what is going on by its inherent and deduced OOE of the element that characterize volume. So you see drill 5 appearing, I will provide a "dechunking" of the difficult drill 5. In science a problem may be difficult. The scientist does not dismay. He works on part of the problem and solves it. Then he, redefines the original problem as a new and easier problem to solve. So I will ask you to do parts of drill 5 as 5-1, 5-2, et.. Here they come.
hers is a list of parts of drill 5 Drill 5-i List the four parts of volume you will merge with price to depict the the combination of variable as a universal consistent sigle market system of operation. Drill 5-2 List the parts of all trends in the simplest terms. 3 or 4 are needed. Drill 5-3 Consider trend containers as envelopes. What envelope has the least number of locii with which to define it. Consider how both algebra and geometry employ simple elements. Drill 5-4 The "Pattern" of the system of operation of the market MUST show the whole cycle of operation. Markets have but two kinds of trends. What feature of shapes MUST be present to allow trends to combine to form the cycle. These four chunks are helpful for getting the pattern. All of CW trading has missed these four chnks of solving the system of operation of the market. We have made a serious beginning. The result of drill 5 is that the foundation has been laid.
Hi Jack, I try to be a non-dominant person, but are you saying that certain legs give anticipatory properties!!!:eek:
I did my first chart and tried my best to do drill 5 before your lack post, Jack. I used the information I drew from that exercise to try my best to complete the drills you. Drill 5 Chart. Conclusions. I wrote some conclusions I came to...I also decided it was best to to draw every peak and trough in the volume Gaussian, because that makes it harder to read. I tried to simplify and pull the general information out. I wrote my conclusions on the chart. I am not quite sure how to differentiate when a down trend starts. In this chart I used, there was a slight down trend lateral as volume dried up... when it increase again the price movement was down. Drill 5 - 1. Increasing, Decreasing, Peak and Trough. Drill 5 - 2 Price trends have three legs, A, B, C... Drill 5 - 3 You need at least three points to draw a container, two on the right and one on the left. Drill 5 - 4 Here is my interpretation of a cycle. I drew the volume in using what I learn from my original drill 5.
BEIGE IS BEIGE We are learning here. Bar-by-bar trading is a very profitable appraoch. It takes so little knowledge. As is seen on ET, most potential traders never get a leg up in making money trends have two ends and a middle. a series of bars form the middle. All middles have same colored leg 2's. when the color changes to the ONE OTHER COLOR, a fifth grader KNOWS HE KNOWS THE TREND IS OVER AND PROFIT SEGMENT IS BANKED So I mentioned the TRAP most neophytes and authors of books have never heard of. I speak about how the DOJI functions to remove the TRAP. Hey Zeus as they say. ANY trader can become an "anticipatory trader". So we did 4 drills and can now trade. the fifth drill casts all trading in concrete for only a few deduced reasons. So I will do the algorithms and hypotheses and parametric measures and logic all speeled out over the next few weeks. CW trading and the OODA can be packed up and put in the archives of the financial industry. the little wolves of Wall street get to go to jail for using all kinds of bulshit to cheat the public. The SEC has been on my ass for about fifty years and has concluded my insider trader profile is just one of their computer screwups cos " I CAN'T KNOW THAT MANY PEOPLE TO TRADE AS a little wolf of Wall St." what bullshiters the SEC are. By now it is too late for any late comers to do WORK and easily catch up. So it always goes.
WOW I am impressed I am so glad you are doing all these things to build your Long term Memory. As you watch in real time you will notice how your feelings change. Soon there will be no point in not being in the market all day long .
My 4th grade son KNOWS but couldn't be bothered. He's more interested in MINECRAFT and CODECOMBAT. He also is amazed as to why us "OLD" people still feel the need to type. lol Good Health Jack!!!